Peru Budget

We decided the budget for Peru really deserves it's own post. Peru is much more on the "normal" tourist trail because of Machu Picchu. Combine this with some unexpected expenditures and we spent just about the same amount for a month in Peru as we did for a month and a half in Ecuador.

Including absolutely everything during out time in Peru, we spent $3,651.36 for 31 days. This comes to $117.79 per day. If you'll recall, our budget is $80/day, so we were well over that. I'll discuss some of the large expenditures that were out of the ordinary below, but first I wanted to point out our largest expenditure (assuming the hospital charges go away): Machu Picchu. We spent $450.33 on site tickets, rail tickets, a collectivo, taxi, bus to the site, lodging, and ridiculously priced ice cream and water just for Machu Pichu. However, how could you visit Peru and not see Machu Pichu? Thus, we never ever looked at what our budget would have been excluding this expensive remarkable site.

We had a number of unusual expenditures that we thought artificially increased the budget. I had to go to the hospital, that was $584. We assume we're going to be reimbursed for the full amount by our insurance, so we expect the daily expenditure will come down to $98.76. We also bought a Jambox in Lima for $280. This was a nice to have and will be discussed in further detail when we do our updated packing post, but without that we'd be at $89.73/day. Also, It was very cold in Cusco and we expect it to get colder, so Jordan and I both bought base layers and gloves. Total cost for the new gear was $192 and without that in the total, we'd be at $83.54 for all of Peru. Finally, I lost my prescription sunglasses in an unfortunate seafaring accident (aka swimming with my glasses on in the ocean) in Montañita. We bought replacements in Lima for $110.48, without this final cost, we'd be at $79.97.

In total that comes to $1,166.48 in weird expenditures. We're pretty happy with the total, Peru was more expensive than Ecuador, but we were able to keep within 25% of our budget even with the gear, Jambox, and glasses included. We're hoping to make up some ground in Boliva, we've heard it is quite cheap. However, it will cost us $270 just to enter the country and there are a number of activities that will require us to join tours to experience.

Balancing Time and Money

How can you....? Two questions that have come up over and over again are "How can you afford to take a trip like this?" and "How do you have the time to take such a long trip?". I would like to write a bit about each of these because many view what we're about to do as so out of the ordinary and so out of reach that it is out of the realm of possibility for normal people. Well folks, I'm here to say that there is no magic trick in making a trip like this happen. We aren't rich, our parents aren't financing it, and up until a week ago, we each held full time jobs. The trip has been in the works for the last five years and it's taken a lot of planning, saving, and discipline to get to where we are today.

The money

We've talked a bit in previous posts about our approach for purchases and goals, but up until now haven't discussed how we saved for the the trip. The first step was deciding on a budget. After doing a lot of research, we decided on $80/day. We wanted to spend one to two years traveling, so we had a big chunk of change to save up. There are two ways to save money: earning more, and spending less. Since we both worked full time, we focused mostly on what we could do to reduce our living expenses.

We continued to drive our 10 year old cars instead of replacing them and taking on a car payment. We bought a roku box and cancelled our cable, which saved us $130 each month. We began meal planning, which saved us roughly $150 a month on grocery costs. We packed our lunches for work every day. We stopped shopping for the sake of shopping. We were able to cut our budget drastically but just looking at our costs and trimming out the extras.

Once we cut down on spending, we needed a savings strategy. Letting money accumulate into our checking account was not working for us... it was too easy to feel comfortable spending a little extra when it was just sitting there. I've heard the advice "pay yourself first" many times, and it is what made saving for the trip possible. We set up an online banking account with ING. At the beginning of each month, an automatic transfer took our savings target out of our regular account and into a "trip savings" account. We did not have debit cards or other easy access to the money, so there was no way for us to accidentally spend it. We essentially lived a self-imposed paycheck-to-paycheck lifestyle, where our primary account was nearly empty at the end of each month. Paying ourselves first helped us successfully save the extra money that we "found" by cutting our budget.

Now that we're on the verge of leaving, we will set up our accounts so that our ING savings will automatically transfer a "paycheck" into the account we plan on using every two weeks. This will help keep us on budget as we travel and minimize our risk if our cards get lost or stolen.

The time

The only way to have time to take a trip like ours is to make the time. There will never be a convenient, easy time to take off and travel for a few years. There will always be jobs (or lack thereof), school, family, kids, houses, friends, pets, and a number of other reasons to make you stay put. Making the time by selling our home and quitting our jobs was emotionally draining. We lost a lot of money on our house, and quitting our jobs in a time of economic uncertainty was scary, but they were both necessary to make the time.

The tradeoff

Trading time for money is something that people do all the time. We go to work for 40 hours a week in exchange for a paycheck. We don't always have time to do the things we want to because we have to go to work. We're getting ready to do just the opposite... trade our money for time. We've scrimped and saved for years and its time to trade in all that hard work to follow our dreams.We will unfortunately miss a few weddings, a graduation, and several holidays while we are away. Life will go on for everyone else while we are gone. Eventually, the money will run out and we'll have to go back to the regular 9 to 5. Until then, we're breaking away from the norm and heading out into the world for the adventure of a lifetime!

"Daniel... we have a problem..."

…these were the words uttered from my mouth when I checked my email to find the subject line “FWD: OFFER ON *address”. I had just stepped out of the shower and checked my phone. I was standing there with dripping wet hair, wrapped in my towel, and a deer in headlights look plastered across my face. I’m not even sure if I was reading the email or just staring at it. Daniel asked me a few times what was wrong, and I finally told him. We have an offer.

Seriously? “We have a problem”… THAT is my reaction?! I have no idea what made me respond like that. The offer ended up being $13,500 below our list price, which was far outside of our comfort zone. Even at full asking price, we anticipated bringing about $30k to closing. For the last few weeks, we have toyed back and forth with the idea of renting. We talked it out and decided that we had to come fairly close to our asking price to accept an offer. Our realtor called, and advised us on a fair counter offer that the buyer would likely accept without a lot of back and forth. Except the number he came up with didn’t work for us. So we countered at $2k below asking, and would include our furniture in the price. We were asked if it was worth losing the buyer over, and said yes.

The next few hours were probably the most anxiety ridden of my life. I felt nauseous, hands sweaty, with a lump the size of a baseball in my throat. We watched an episode of Glee on Hulu to pass the time. We took a drive just to get out of the house for a bit. After two long hours, our realtor let us know that the buyer was in class for the night and we wouldn’t hear back until morning. Lovely. A night of no sleep was in store for us.

Fast forward to the morning. I woke up grumpy and tired after tossing around all night. Checked my email: nothing. We discussed what our plan would be if/when we got a counter offer. We both headed to work on edge, trying our best to put on a normal face for our coworkers. I compulsively checked my email and around 10am, we had another counter offer. Our realtor said the offer was very strong, at $5,500 below list price and excluded furniture. We still had our heart stuck our our original number, and countered again.

On our way to dinner, we called our realtor to see if there were any updates. Seventeen minutes later (who was counting?), the buyer gave a final offer of $3k below listing with the furniture included. “Done” was the first and only word out of my mouth. He started giving us his realtor “fluff” about how this was a final offer and we would be unlikely to find someone else to pay that price. After a minute or so, Daniel and interjected. “We said done. As in done deal. Yes”.

…and the weight of the world has fallen off of our shoulders. The anchor keeping us here has been cut free. After months of struggling with indifference and being in limbo, we are moving forward. I am both excited and terrified!